Definition of a Director
This section defines a director in terms of the qualifications and responsibilities required for a person to be eligible to serve as a director of a company.
Qualifications
A director of a company must have the skills, experience, and qualifications necessary to perform the duties and responsibilities of the role. Any director should have the minimum qualifications required by law, such as the relevant qualifications relating to their particular field of expertise and any additional qualifications necessary or desirable for the role.
Responsibilities
The duties and responsibilities of a director of a company are determined and laid down by the companys constitution, the relevant legislation and regulations. A companys directors must comply with all applicable laws, regulations and professional codes of practice.
Directors should act in good faith and with reasonable care, skill and diligence in the performance of their duties. Directors should act in the best interests of the company and its shareholders, and should also ensure that none of their action or inaction is likely to have a detrimental effect on the welfare or interests of the company. Generally, directors should act honestly and in the manner believed to be in the best interests of the company.
The accepted standards of business conduct must be observed by all directors. They must take all reasonable steps to detect breach of such standards and take the appropriate action to prevent any further breach. Directors must observe due process and take into account all relevant factors when making decisions.
All directors must also recognise their fiduciary relationship with the company, and exercise due care and skill when performing their duties. Directors must exercise independent judgment on behalf of the company, and should always consider the potential implications of any decision that is made.
Independence
As a general rule, the companys directors should remain independent from those with whom the company has any business interests or any other relationship that might influence the decisions or judgments that the directors make on behalf of the company.
Any director who may also have an interest in any matter of the business of the company should disclose such interest in advance to the board of directors, and should not be present at any meeting at which the matter is discussed.
Conflicts of Interest
All directors of a company are required to avoid situations where their personal interests may conflict with their obligations as directors. Any potential conflict of interest should be disclosed to the board of directors.
External directorships
Directors are expected to ensure that they comply with any legal requirements surrounding the acceptance of external directorships. Such directorships may have the potential to create a conflict of interest or may adversely impact on their performance as a director of the company.
Remuneration
The remuneration of directors of a company is subject to certain legal requirements and is determined by the companys constitution. The company may also have specific policies and procedures in place for the payment of directors remuneration. Directors should ensure that their remuneration is set at the appropriate level for the particular duties and responsibilities of the role.
Disqualification
There are a number of circumstances in which a director may be disqualified from holding their office. These include failure to pay any monies owed to the company, being declared bankrupt, or having been convicted of a fraud-related offence. In such cases, the director should immediately make a full disclosure to the board of directors.
Conclusion
The qualifications, duties and responsibilities set out in this section are designed to ensure that directors of a company fulfil their obligations in a manner that is in accordance with all applicable laws and regulations, and is in the best interests of the company. Directors should observe the standards of corporate governance, and always act in the best interests of the company.
